Oregon is one of the few states with no sales tax, which simplifies life for shops and service businesses alike. Forming an LLC costs $100 and the annual report costs $100. The taxes to plan for instead are Oregon’s high personal income tax, the Corporate Activity Tax once a business grows, and, in the Portland area, several local business taxes.
What an Oregon LLC costs
Table of Contents
| Item | Cost | When |
|---|---|---|
| Articles of Organization | $100 | At formation |
| Annual report | $100 | By your LLC’s anniversary, each year |
| Assumed business name (if using a DBA) | State fee | When registering |
| Corporate Activity Tax | Only above $1 million in Oregon commercial activity | Yearly, if applicable |
| Local business license taxes | Varies (Portland area and some cities) | Yearly, if applicable |
Step 1: Choose your LLC name
The name must include "limited liability company", "LLC" or "L.L.C." and be distinguishable from other names on record. Search the Oregon Business Registry, then check federal trademarks, domains and social handles with our business name checklist.
To trade under another name, register an assumed business name with the Corporation Division.
Step 2: Appoint a registered agent
Every Oregon LLC needs a registered agent with a physical Oregon address, available during business hours. You can serve yourself, name another adult or use a commercial agent.
Step 3: File Articles of Organization
File Articles of Organization with the Oregon Secretary of State’s Corporation Division, usually online through the state’s business registry, and pay $100. You’ll include the LLC’s name, registered agent, principal office and mailing address, and the names of members or managers, along with an address where the division can mail notices. Online filings are typically processed quickly.
Step 4: Create an operating agreement
Oregon doesn’t require you to file an operating agreement, but every LLC should have one, covering ownership, management, profit sharing and what happens when members join or leave.
Step 5: Get an EIN and open a bank account
Apply for a free EIN from the IRS online, then open a business bank account using your filed Articles and EIN. See choosing a business bank account.
Step 6: Register for state taxes
Oregon has no general sales tax, so most businesses don’t collect one. You’ll still register with the Oregon Department of Revenue and the Employment Department if you hire, for withholding, unemployment insurance and other payroll programs. Some specific activities, such as certain lodging and vehicle transactions, have their own taxes.
Why no sales tax matters for your business
Oregon’s lack of a sales tax shapes several business decisions:
- Retail pricing is simpler. The price on the shelf is the price at the till, which customers like and many visitors from neighboring states seek out.
- Online sellers based in Oregon don’t collect Oregon sales tax, but may still need to collect tax for customers in other states once they pass those states’ thresholds.
- Buying for your business in other states may involve their sales or use taxes.
- The trade-off is income tax. Oregon raises more of its revenue through personal income tax, so owners of profitable LLCs should plan for it when setting prices and their own pay. Our service pricing calculator helps you build taxes into your rate.
Step 7: Understand the Corporate Activity Tax
Despite its name, Oregon’s Corporate Activity Tax (CAT) applies to most businesses, including LLCs, based on gross receipts from Oregon commercial activity:
- Businesses must register once their Oregon commercial activity exceeds $750,000 in a year.
- Tax is owed only when commercial activity exceeds $1 million, generally as a flat amount plus a percentage of taxable activity above that level, after a partial subtraction for certain costs.
Most new small businesses won’t owe the CAT, but growing businesses should watch the thresholds.
Step 8: File your annual report by your anniversary
Every Oregon LLC files an annual report with the Corporation Division by the anniversary of its formation, for $100. The division sends a reminder to the mailing address on file. LLCs that don’t file can be administratively dissolved.
Portland-area business taxes
Businesses operating in Portland and Multnomah County face several local taxes, administered together by the city’s revenue office:
- The Portland business license tax on net income from business in the city.
- The Multnomah County business income tax.
- A regional Metro supportive housing services business income tax for businesses above certain gross receipts.
Other Oregon cities also require business licenses. Check local rules before you open.
How an Oregon LLC is taxed
By default, LLC profits pass through to the owners, who pay federal income tax, self-employment tax and Oregon’s graduated personal income tax, which has one of the highest top rates in the country. Multi-member LLCs taxed as partnerships file an Oregon partnership return. Oregon also lets eligible pass-through entities elect to pay tax at the entity level. LLCs electing C corporation status pay Oregon’s corporate excise tax. Ask a tax professional which option suits you.
Hiring your first employee in Oregon
Beyond the federal steps in our first employee guide, Oregon employers generally:
- Register for state withholding and unemployment insurance.
- Carry workers’ compensation insurance, required once you have employees.
- Remit Paid Leave Oregon contributions, the state’s paid family and medical leave program.
- Follow Oregon’s three-tier minimum wage, which differs between the Portland metro area, standard counties and rural counties.
- Provide paid sick time and report new hires.
Your Oregon LLC compliance calendar
| Deadline | Filing | Paid to |
|---|---|---|
| Your anniversary, yearly | Annual report ($100) | Corporation Division |
| Quarterly | Payroll taxes, unemployment and Paid Leave Oregon contributions | Department of Revenue; Employment Department |
| Yearly, if applicable | Corporate Activity Tax return | Department of Revenue |
| Yearly, if applicable | Portland, Multnomah and Metro business taxes | City of Portland revenue office |
| April 15 (generally) | Partnership return, if multi-member | Department of Revenue |
Example: state costs for your first two years
For a single-member LLC below the CAT thresholds:
| Year 1 | Year 2 | |
|---|---|---|
| Articles of Organization | $100 | — |
| Annual report | — | $100 |
| State total | $100 | $100 |
Add an assumed business name, any local business license taxes, and professional or contractor licenses. Use our startup cost calculator to plan.
Oregon rules for common types of business
Contractors. Anyone paid to do construction, remodeling or repair work in Oregon must hold a license from the Construction Contractors Board (CCB), with a bond and insurance, before advertising or bidding. Electrical and plumbing trades have additional licenses. See our home services industry profile.
Food businesses. Restaurants and food carts are licensed by county health departments. Oregon’s home kitchen and farm direct rules let some producers sell certain foods directly to consumers. See our cottage food business guide.
Childcare. Child care centers and family child care homes are licensed by the state’s early learning department. See our home daycare guide.
Oregon or Washington?
Businesses around Portland and Vancouver often weigh the two states. Oregon has income tax but no sales tax; Washington has no income tax but taxes gross receipts through its B&O tax and collects sales tax. If your business regularly operates in both, you may need to register in both. See our Washington guide.
Mistakes to avoid
- Doing construction work without a CCB license, even small jobs.
- Ignoring Portland-area business taxes when budgeting.
- Forgetting to register for the CAT once commercial activity passes $750,000.
- Missing your anniversary-date annual report.
- Using the wrong minimum wage tier for your location.
- Letting the mailing address on file go stale, so annual report reminders never reach you.
Frequently asked questions
Does Oregon have a sales tax? No. Most Oregon businesses don’t collect sales tax, though a few specific activities carry their own taxes.
Will my small LLC owe the Corporate Activity Tax? Not unless its Oregon commercial activity exceeds $1 million in a year, though registration is required above $750,000. Track your gross receipts as you grow.
Can I be my own registered agent? Yes, with a physical Oregon address where you’re available during business hours.
Is my LLC’s information public? Your LLC’s name, registered agent, principal office and listed members or managers appear in the state’s business registry.
When is my first annual report due? By the first anniversary of your LLC’s formation. The Corporation Division mails a reminder beforehand.
Next steps
Read the Start a Business A–Z guide, see hiring your first employee, and plan with the break-even calculator.
This guide is general information, not legal or tax advice. Fees and rules change; check the Oregon Secretary of State and Department of Revenue before you file.
Sources
- LLC University, LLC annual fees by state (2026)
- Jupid, LLC cost by state 2026
- Oregon Secretary of State, Corporation Division
- Oregon Department of Revenue
Last reviewed October 18, 2026. Startup costs are estimates; check local prices, licensing and tax rules before you commit money.
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